Suzuki to Exit U.S. Car Market After Almost Three Decades
Suzuki Motor Corp. will pull out of the U.S. car market after almost three decades, following Saab Automobile and Isuzu Motors Ltd. (7202) among automakers making their exits after failing to earn profits in the country.
Suzuki will stop the sale of new automobiles in the U.S., though it will continue offering motorcycles, all-terrain vehicles and boat motors, the Hamamatsu, Japan-based carmaker said in a statement today. The company’s U.S. distributor filed for bankruptcy protection in Santa Ana, California as part of the reorganization.
The withdrawal marks the end of a business that began in 1985 and never managed to win over U.S. consumers as Toyota Motor Corp. (7203) and Honda Motor Co. (7267) did. The move allows Suzuki, which has the smallest U.S. market share among Asian automakers, to focus on defending its lead in India, where the company is facing mounting competition from Hyundai Motor Co. (005380)
“Suzuki is no longer among the carmakers like Toyota or Honda to have an advantageous position in the U.S., so why not focus on what it is good at?” said Satoshi Yuzaki, Tokyo-based general manager at Takagi Securities Co. “It makes sense for Suzuki to focus on India and other Asian markets.”
Suzuki’s sales in the U.S. will stop after its current inventory runs out, said Ei Mochizuki, a Tokyo-based spokesman.
American Suzuki Motor, the wholly owned U.S. distribution unit, agreed to begin reorganization proceedings under Chapter 11 of the U.S. Bankruptcy Code, Suzuki said. The unit had $346 million of debt and $233 million in assets as of Sept. 30, according to bankruptcy filings.
Suzuki will retain dealerships to maintain existing vehicles, Hideki Taguchi, a company spokesman in Tokyo, said today.